Photographer: Getty Images

EBay Banks on Bar Codes for a Comeback

The online marketplace must manage an enormous inventory.

Hoping to outgrow its image as a glorified garage sale and move up in Google searches, EBay is turning to technology developed 70 years ago: the bar code. The machine-readable symbol that keeps supermarket lines moving is helping EBay manage vast amounts of data associated with the 6 billion products—from smartphones to video games, handbags to tires—listed at the online marketplace each year.

Merchants will be able to enter a full description of a sales item by using a smartphone camera to scan its Universal Product Code. EBay reads the scan and automatically lists the item’s specifications. Before, every detail, including brand, model, and dimensions, was entered manually.

UPCs are a central part of what EBay calls its “structured data initiative,” started in June, to organize items into a catalog that shoppers can easily search using filters such as price, features, and condition. The switch started with auto parts and accessories, one of EBay’s fastest-growing categories. The UPC is also used to call up consumer reviews and product images, which create a degree of permanence on EBay that search engines will reward with better placement.

EBay says the code provides a sufficient baseline of information because 80 percent of all products sold there are new. A key goal is to standardize the amount and type of information that merchants list. The initiative will eventually expand to most items on the site.

Chief Executive Officer Devin Wenig, who took over at EBay in July after its split from transactions business PayPal, sees the effort as the solution to sluggish growth and loss of market share to Amazon.com. EBay has lost almost one-fifth of its value since the spinoff. Investors are skeptical of the data strategy. “This in and of itself doesn’t solve EBay’s major problem,” says Steve Weinstein, an analyst at research firm ITG. “The major problem is answering, ‘Why should shoppers go to EBay instead of anywhere else?’ I don’t think they have a good answer to that.”

Wenig says the financial results investors want will come as more categories are integrated into the catalog. EBay planned to increase the share of eligible listings managed this way to 60 percent by the end of February, up from 38 percent at the end of 2015.

So far, some merchants like the change. Quick Ship Electronics, which sells consumer devices on EBay, had some desktop computers and laptops languishing in its inventory. Once the company entered the UPCs on EBay’s catalog, the items sold within days, CEO Jordan Insley says.

Scott Brown, e-commerce senior marketplace manager at the online camera store Adorama, says he’s waited for years for EBay to incorporate scannable codes. His company sells about three times as much on Amazon as it does on EBay. “EBay really wants to get out of the shadows of Amazon,” he says. “By taking control of their data, they might be able to do it.”

The bottom line: EBay is using bar codes to standardize product listings in a data catalog in an effort to regain business lost to Amazon.

(Corrects Scott Brown's title in the eighth paragraph.)
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